Shift seen in use of overseas remittances to Ho Chi Minh City

Dollar/dong exchange rate in the first five months of 2018 has not fluctuated sharply. Photo by Reuters

Central Bank official says most of the funds have been invested in manufacturing instead of traditional channels.

A sharp increase in remittances to Ho Chi Minh City this year has been accompanied by a shift to investment in manufacturing rather than real estate, stocks and savings accounts, a senior officer at the central bank says.

Nguyen Hoang Minh, deputy director of the HCMC branch of the State Bank of Vietnam (SBV), said that by the end of May, a total of $2 billion has been transferred from overseas to the largest city in Vietnam.

In April and May, remittances reached $0.9 billion, while $1.1 billion was received in the first three months.

The money has been mostly used in manufacturing business instead of real estate, stocks and savings as usual, Minh said.

The increasing amount of remittances shows the positive situation of Vietnamese expats in other countries, he added.

With a stable macroeconomy and exchange rate not increasing in response to market sentiments, remitters are gradually changing foreign currency into Vietnamese dong, he said.

For this reason, the dollar/dong exchange rate has not fluctuated sharply since the beginning of the year. As of Tuesday, the dollar was valued at VND22,775–22,845, unchanged from Monday.

Remittances to Ho Chi Minh City has been rising by 8-10 percent each year for several years now, official statistics show.